The Anti-Wall Street: Would You Give Half Your Profit To Charity?

Many companies talk about employee engagement and have lofty mission statements, but few live them. Meet Bridgeway Capital Management, the anti-Wall Street based in Houston, Tex. For 20 years, they have given 50 percent of their profits to charity, capped partner compensation at seven times the earnings of the lowest-paid employee, and have garnered $2.3 billion in assets through a relentless dedication to customer satisfaction.

The company considers itself a “generous business,” a company committed to challenging its owners, staff, and families to lead transformative change through the joy of giving. Bridgeway president Mike Mulcahy says, “We’ve created a staff of people we really enjoy, employees with character and passion, who work together for a bigger and more meaningful purpose. And, if entire families get involved, the company becomes a more important and valuable part of each of their lives.”

At Bridgeway, the rule is simple, according to Mulcahy. “Since Bridgeway’s founding in 1993, we have maintained a commitment that no full-time employee at Bridgeway can make total compensation greater than seven times the total compensation (salary, bonus, retirement) of the lowest-paid employee,” he says.

The intent behind the policy is multifold: It 1) recognizes the role that all employees play in Bridgeway’s success; 2) helps maintain operational flexibility in challenging economic environments, allowing for continual investment in the business; 3) creates a work environment that attracts, challenges, excites, and fulfills in ways that money cannot buy; and 4) serves to protect from the greed that too often and too easily creeps into company culture.

A Culture and Policy of Giving Back

According to “Conscious Capitalism” co-author Raj Sisodia, companies that care outperform. He examined 28 companies that were “firms of endearment,” based on stated purpose, generosity of compensation, quality of customer service, and investment in their communities. The 18 publicly-traded companies out of the 28 outperformed the S&P 500 index by a factor of 10.5 times between the years 1996 and 2011.

50 percent of Bridgeway profits are given to social service organizations, with a heavy focus on eliminating genocide and helping people out of poverty. Bridgeway founder and CIO John Montgomery says, “We see ourselves as servant leaders. Each day, I dedicate all that I am and all that I have to God as part of my spiritual practice. That includes my ownership of the company. The only idea I had in starting Bridgeway was having a strong mission statement that would attract people who wanted to make a real difference in the world.”

Mission Mindful and Data-Driven

At Bridgeway, investors come first. Montgomery says, “We’re committed to taking the idea of stewardship in business to a whole new level by serving as a bridge between our success, as a result of putting investors first, and the enormous needs around the world.” That value is created through a long-term vantage point and a rigorous commitment to use data-driven investment techniques.

But while many investment firms claim a data-driven, long-term approach, investors in Bridgeway know they’re not only getting a service, but enabling the company to create positive change. Mulcahy says, “In this day, when the purposes of businesses are being challenged, we wish more companies would focus on the bigger picture and empower their people to make a difference around them.” This mission-forward approach, clearly demonstrated in Bridgeway’s everyday practices, has attracted significant investment and greatly lowered client turnover. It pays to care.

What It Means For You

I’m not advocating every business give 50 percent of its profits to charity or cap its compensation structure. While it works for Bridgeway, neither of those rules is universally valuable. The trick is to open your mind to possibilities that transcend business dogma. Here are a few questions to ask:

1) What is the “great good” your business is trying to achieve, and why?

2) How do your everyday practices represent this mission?

3) What traditional practices don’t make sense in light of your mission?

4) What small set of rules would help guide your actions?

Once you have the answers to those questions, you can start finding ways to live out your lofty goals and mission statements. It pays to put your money where your mouth is — and the effect will last long beyond the time it takes to make the effort.

Brent Beshoreis the founder and CEO of adventur.es, a company that identifies problems to tackle and looks for those who share their passion to create change. Connect with Brent on Twitter, LinkedIn and Google+.

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